questions to ask yourself before getting started

It is not without reason that life insurance is often qualified as a “Swiss army knife” of savings: its extreme flexibility allows it to adapt to a wide range of wealth needs, at all times of life. life.

But before subscribing to this product and discovering the extent of its possibilities, it is better to master its basic operation.

  • What does life insurance cover?

Nothing ! Contrary to what the name suggests, it is not an insurance but a regular investment product. Its name is the result of history: originally, life insurance guaranteed the payment of a capital to its subscriber if he was still alive at a certain age or date.

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It should therefore not be confused with death insurance, which provides for the payment of a capital, the amount of which is fixed by the contract, to beneficiaries if the insured dies during the insurance period.

  • Who can this product be purchased from?

It is offered by many institutions: banks (through a subsidiary), mutuals and insurance companies, wealth management advisers but also insurance intermediaries, such as general agents, physical brokers or online, etc.

  • Why am I being asked to name beneficiaries?

When taking out your contract, you must enter the name of the person (s) to whom the insurer will have to allocate the capital of your contract if you die. This is an important point, which conditions the fiscal and civil advantages during inheritance.

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  • Are my savings blocked for eight years?

No, the sums invested in life insurance remain available at all times and do not bear any blocking. It usually takes a few days or weeks to recover them when needed. The eight-year period is recommended for fiscal reasons: it is from this point that the taxation is the most advantageous.

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  • What media can we invest in?

You have the choice between the fund in euros, guaranteed, and “units of account”, which are indexed to the value of the underlying financial products. It is generally an advisor from the institution with which you have chosen to subscribe who will help you determine the best distribution between these compartments, according to your objectives, your assets and the answers you have provided to the questionnaire that will have been submitted to you during of the first contacts.

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  • What fees apply?

Life insurance has a reputation for being quite expensive, but there are important differences between institutions and intermediaries. In general, you will have to pay installment fees (up to 5% of the amounts invested), annual management fees on accumulated capital (from 0.5% to 1%), and arbitrage fees when you change the allocation of your savings (for example, from an equity fund to a bond fund).

You have 58.06% of this article left to read. The rest is for subscribers only.

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